1. Field of the Invention
The present invention relates to computer-based systems for calculating and administering taxes. More specifically, the present invention relates to an apparatus and a method for determining taxes that is configurable for local jurisdictions.
2. Related Art
As companies expand their businesses beyond national borders and into the global marketplace, it is becoming increasingly harder to ensure that taxes are accurately determined. Determining taxes and managing tax compliance on a global scale is an enormously complicated task because each legislature with a right to levy taxes within its jurisdictional boundaries can establish its own set of taxes, as well as its own set of rules for regulating tax compliance. For example, in the United States alone there are over 6,000 individual jurisdictions that have the right to levy taxes, and perhaps that many more again worldwide.
The nature, the extent and the sophistication of the information required to calculate taxes varies from jurisdiction to jurisdiction. This makes the codification and structuring of such information in a manner amenable to being understood by a computer-based system very difficult. Consequently, existing computer-based systems for managing tax compliance are custom-built for each jurisdiction, or, at best, for a group of jurisdictions. This requires large amounts of programmer time to build systems for each jurisdiction, which can result in a considerable expense to the company building the computer-based system. In addition, companies that use computer-based systems for processing taxes (hereafter called “deploying companies”) cannot streamline their processes or achieve economies of scale. Also, deploying companies need to incur additional costs in integrating their business-processing computer programs with many computer-based systems for processing taxes. Moreover, adding new countries or complying with new taxes/genre of taxes in a country already supported or complying with new rules for currently supported taxes involves producing yet even more [program] code, and consequently requires even more programmer time. Unfortunately, much of this programmer time is wasted because similar solutions are typically developed for each of the different jurisdictions.
Moreover, tax rules continually change for each jurisdiction. Hence, the underlying code for a computer-based tax management system must be continually modified to keep pace with these changes. At present, these changes are made at significant cost by a skilled programmer operating under the direction of a tax expert for each of the different jurisdictions.
What is needed is an apparatus and a method configurable for local jurisdictions that facilitates determining taxes without requiring extensive programming for individual tax jurisdictions.